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Expertise

Carbon Markets

How Carbon Markets
Help Decarbonization

Let’s face it – transitioning to decarbonized solutions presents myriad challenges.

One of the most basic is how new technologies can compete commercially against market incumbents that have spent decades optimizing cost efficiencies and advocating for a policy structure that favors their incumbency. We have seen clean, renewable energy solutions out-compete fossil alternatives head-to-head once they have matured.

The challenge is establishing the scale and investment needed to achieve commercial competitiveness.

Environmental attribute markets are a potent tool in closing the gap and allowing new technologies to compete. AJW’s team has uniquely deep expertise in environmental markets going back to the SO2 and REC markets that started in the 1990s. We have worked on the legislation and regulations that create emission trading markets, optimized the market and investment signals in others, supported client efforts to ensure their ability to participate in markets, and helped manage investment decisions related to emission market revenues.

Carbon Emission Markets

Revenue from environmental attributes can be crucial for project success. Establishing clarity regarding potential opportunities and risks related to environmental market revenue is essential. Understanding the eligibility and potential rate of attribute generation is foundational. It is also important to have clarity regarding the price volatility risks and the option or limitations on generating revenue in multiple markets simultaneously.

AJW can help.

Voluntary Markets

At times, the voluntary markets can be more nimble than government-created emission markets that can provide critical support for early stage projects and technology demonstrations. Voluntary market participation can highlight new technologies for potential investors and customers. They can also help validate an approach and be used to expand existing mandatory emission markets. At the same time, gaining acceptance for new strategies and technologies in voluntary markets can be challenging. It is essential to work with the right mix of stakeholders to maximize the role of participation in these markets.

Emerging Markets

For some strategies, including sustainable aviation fuels (SAF), environmental attribute revenue is available, but more is needed to reduce transaction costs and maximize growth potential. AJW remains at the forefront of efforts to ensure environmental markets include all the tools needed to maximize opportunities for innovators to develop and deploy decarbonization technologies at a global commercial scale.

Targeted Services

  • Assist government entities to establish/optimize regulatory schemes
  • Cap-and-trade advisory
  • Certification and pathway petition support (RFS/LCFS)
  • Program design advocacy
  • Maximizing environmental attribute revenues

OUR EXPERTISE

Our Experts

Richard W. Corey

Partner

William Tyndall

Strategic Lead, Energy Transition

Rich Kassel

Partner

Mary Solecki

Partner